Directions

1. Response posts 

0. Select two peers to respond to. 

1. Take on the role of a member of the executive team. Read their recommendations thoroughly then provide some rationale as to why you think their recommendations are persuasive (or not).

Evaluate the differences of the political and cultural environment that must create challenges and pose uncertainty for foreign investors.

Investing in China can be profitable, but there are challenges. China used to have a one child policy. This means every couple was only allowed legally to give birth to one child. “The result will inevitably be an older population, inefficient workforce, and greater need for a welfare state.”. (Kirchenbauer, 2021). Labor costs in China have risen. Vietnam has been taking their business as their business practices are considered straightforward. China makes it quite difficult to invest or start a company. “Foreign investment in the country has been under the regulation of the Catalogue of Industries for Guiding Foreign Investment (Catalogue) since 1995.” (Boquen, 2022). As for cultural differences, there are many, but China does not allow that to stop foreign businesses from coming in. “The Confucius Institute, as a landmark measure for Chinese cultural “going out”, reduces the negative impact of cultural differences on Outward Foreign Direct Investment (OFDI).” (Wei, Zhao, & Hou, 2020). The effort that China puts in is equal to the regulations in place that hinder investors. Persistence and drive will benefit a foreign investor.

Take on the role of a consultant to give some specific examples and provide well-thought recommendations.

Research must be done before investing in anything, this includes other countries. There are many steps to follow to successfully invest in China. It can be done. I recommend starting off small and getting comfortable with Chinese rules and regulations. Starting a business in China is different, but not impossible. Investing in stocks is simple with technology today. Investing in a large company like Alibaba is always a great start when it comes to investments in China. Again, start off start and then invest more and more.

-Jen Lord

References

Boquen, A. (2022, March 7). 9 Steps to Starting a Business In China as a Foreign Company. Retrieved from New Horizons: https://nhglobalpartners.com/starting-a-business-in-china/

Kirchenbauer, R. (2021, November 9). You Shouldn’t Invest in China: This is Why. Retrieved from Investasian: https://www.investasian.com/property-investment/shouldnt-invest-china/

Wei, H., Zhao, B., & Hou, Y. (2020). Research on the Investment Effect of Chinese Cultural “Going Out” —Empirical Evidence from the Countries along the “Belt and Road”. Retrieved from Open Journal of Statistics, 10, 554-564. doi: 10.4236/ojs.2020.103033.

    When it comes environments that influence how business is conducted and can create challenges both political and cultural play large components. On the aspect of a political environment, it makes up the basics of how business is conducted within an area. This is done by the laws and regulations that are implemented, the more stable the political aspects the better chance of a positive influence on those conducting business within the area (MBA Skool, 2021). The next component being the cultural environment of an area, has a lot of sway in many aspects of what will be successful and expected within an area. An important note about cultural environment is that it’s influenced by historical believes that are set by the society and are key when it comes to business analysis for the potential area (MBA Skool Team, 2021). Both political and cultural aspects can provide a struggle when conducting business because these two may not always align but a balance must be obtained. An uncertainty that foreign investors may face is not being aware of what the cultural expectations are when it comes to business being conducted. In addition, each location has their own politics that are at play which means they may not be the same as one’s home country. This difference between areas can be difficult for some investors to understand which has plays as a large uncertainty that the foreign investors must face.

When it comes to an individual making the decision to invest in foreign organizations, there are many aspects that an individual can take. The aspect of cultural differences is a large barrier that can be confusing for investors to get by (Cote, 2020). This is due to the common action of posing one’s own culture onto another’s. A way that investors can help respond to the concern is looking for assistance with those who know the country they are considering. Having this connection with someone, allows for investors to be more aware of what is actually is occurring and be able to communicate it properly. The way organizations can help entice foreign investors would be having people within their ranks to provide assistance to those who are interested.

Reference

Cote, C. (2020). 5 Common Challenges of International Business | HBS Online, from   

MBA Skool. (2021). Political Environment Meaning, Importance, Factors & Example | MBA Skool, from 

MBA Skool Team. (2021). Cultural Environment Meaning, Importance & Components | MBA Skool, from